CRD IV Reporting in 2024: Understanding the Latest Regulatory Change

Introduction

Directive 2013/36/EU and Regulation (EU) No 575/2013, together known as CRD IV/CRR, set the current guidelines for prudential obligations in banking. To ensure that the banking single rule book is fully implemented, they allow for the adoption of numerous delegated and implementing acts. They outline the procedures that responsible authorities and establishments must follow to fulfil the duties outlined in CRD IV Reporting. The latest consolidated version is dated 28/06/2021. This blog will explore the latest regulatory change in CRD IV reporting.

Review of Investment Firms’ Prudential Framework

Investment firms are preparing for a big change as the prudential framework, the foundation of financial stability, is being thoroughly reevaluated. All stakeholders must have a comprehensive grasp of this updated framework, which is intended to improve risk management and protect investor interests.

The Commission suggested reviewing the CRD IV and MiFID II/MiFIR-described prudential framework for investment firms in December 2017.
On February 26, 2019, the Parliament and Council came to a political accord.
On April 18, 2019, the Parliament adopted the proposal.

This implies a continuous endeavour to modify and enhance regulatory structures to tackle the evolving terrain of investment enterprises.

The Trading Book’s Fundamental Review (FRTB):

As part of Basel III, the Basel Committee on Banking Supervision (BCBS) created the extensive set of capital standards known as FRTB. It is intended to be used with the wholesale trading operations of banks. January 1, 2023, is the deadline for FRTB implementation in the EU.

The adoption of FRTB is a sign of dedication to improving banks’ supervision and control of trading activity.

CRD IV Reporting Impact on Bank Financing

The Capital Requirements Regulation’s adoption is taken into consideration by the ECB. This significant law is largely strengthening the resilience of the EU financial industry. It is also crucial to apply prudential standards uniformly across all EU members to maintain financial stability and fortify financial integration in Europe. Furthermore, the legislation above introduces significant novel instruments that confer flexibility upon macroprudential authorities in executing policies intended to mitigate systemic risks.

CRD IV Reporting Effects in Long-Term

Both theoretical and empirical research point to long-term net beneficial impacts, with the negative effects of the loan supply concentrated during a brief transitory period as banks adjust to the new regulations. Evaluating the effects of regulations is crucial, and authorities must ensure that the advantages of intervening through regulation outweigh the disadvantages. In the future, the Commission will need to regularly assess how post-crisis regulations are calibrated to keep regulatory calibrations at levels that optimize overall societal benefits.

How Can DataTracks Help?

Driven by the FCA or the EBA, the banking, financial, and insurance industries must comply with many complex and demanding CRD IV rules. Furthermore, qualified businesses find it more difficult to create and provide high-quality XBRL reports due to the new regulations and requirements for managing digital risk and operational resilience.

This mandate intends to maintain a transparent and high-quality reporting system by utilizing a comprehensive solution that enables financial institutions and investment firms to meet COREP, FINREP, and other reporting standards.

For any queries related to your business, reach us at enquiry@datatracks.eu or call +31 20 225 3702.